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Sequestration – Bankruptcy (Scotland)

To qualify as a creditor to petition for an individual’s sequestration, apparent insolvency must be established within the
preceding four months. This can be done on the expiry of a statutory demand which has not been objected to timeously or on
expiry of a Charge for Payment of Money. A Charge can be served on any document which contains a lawful warrant for execution
which may include a decree (Judgement) or a document registered in the Books of Council and Session, such as lease, minute of
agreement, guarantee, Certificate of Money Provisions or the like.

A petition for the sequestration of a debtor may be presented by:

a qualified creditor or creditors. A qualified creditor is one to the debtor owes at least £3,000 (2 or more creditors
who are together owed at least £3,000 can petition jointly);

a trustee under a trust deed granted by the debtor; or

the debtor.

There are requirements specific to each type of petition and others that are common to all petitions for sequestration.

Common requirements

The common requirements are:

1. The court must have jurisdiction.

The Sheriff Court has jurisdiction if, at any time in the year immediately preceding the date on which the petition is presented,
the debtor either:

had an established place of business in the Sheriffdom; or

was habitually resident within the Sheriffdom; or

was a partner in a firm which the Sheriff has jurisdiction over and which has been sequestrated or is currently subject to
sequestration proceedings.

The Court of Session also has general jurisdiction. A creditor's petition may be presented either to the Court of Session or
the Sheriff Court. A debtor's petition will normally be presented to the Sheriff Court.

2. The debtor must owe at least £3,000.

Restrictions

Restrictions are placed on creditors from extending or petitioning for sequestration whilst a debtor is in the Debt Arrangement
Scheme, subject to a Trust Deed or an approved moratorium.

The petitioning creditor is obliged, and must confirm to the court that a search has been carried out on the DAS Register and
that the debtor is not subject to a DAS, Trust Deed or Moratorium.

The content of this website is for general information only and should not be relied upon. It is not intended
to be construed as legal advice and should not be treated as a substitute for specific advice. Contains public sector information licensed under the Open Government Licence v3.0.